Making extension

and advisory services

©FAO/Nozim Kalandarov
market-oriented
Why should extension and advisory services be “market-oriented”?
Food production and consumption patterns have changed significantly in recent decades. Increased incomes
have triggered demand for higher-value food products, while urbanization has led to the expansion of retailing.
In the meantime, food supply chains have become ever more integrated and globalized. This has imposed additional
constraints on the majority of small-scale and semi-subsistence farmers. The required shift from subsistence
farming to more commercially-oriented farming is a slow process and often hampered by weak management and
business skills, limited ability to manage risks, the quality, quantity and timing of production, poorly organized
producers, lack of capital, poorly developed markets, and the high costs of intermediaries and transactions.

To overcome these challenges, rural producers need support. Pluralism in extension and advisory services
(EAS) can facilitate a broader range of services, and play a role in facilitating market linkages, developing the
necessary skills, coaching on business and marketing, organizing producers, and brokering relations, as well
as fostering agri-entrepreneurship both on-farm and along the agricultural value chain.

Market oriented EAS: supporting producers to “produce to sell” through sustainable market integration!

What does market-oriented preventing market distortion while managing market-

related risks.
extension and advisory services
mean in practice? ••Supporting producers in all aspects of commercialization,
from production to marketing through better integration of
value chains using a food systems approach.

••Making
Market-oriented EAS support rural producers in accessing
complementary services available to assist
local, national and international markets and sustainably
farmers to manage their farms, develop their agro-
improving their income and livelihoods, while contributing
enterprises, link to input and output markets, and
to overall food security and poverty reduction. This entails:
deal with risks. These may include facilitating access
••Implementing policies, regulatory frameworks,
institutional support systems and effective governance
to knowledge and information, credit and finance,
inputs and technologies, organizational and business
to ensure transparency, rules and standards (e.g. development, and post-harvest, value adding and
food safety), coordination and monitoring, as well as market support.
 Reforming extension and advisory services

Making it happen
There is no prescribed order for the actions recommended, as they are often
interdependent and simultaneous. Priorities may vary depending on the
local context i.e. existing challenges regarding the institutional landscape
and functioning of markets.

©FAO
Developing the capacities of extension and advisory
services providers and producers Pre-conditions
EAS providers usually lack the capacity to provide market-oriented EAS.
for success
Similarly, rural producers lack the capacity to benefit from markets, manage However, while a strategy to
their farms as a business, produce for the market and negotiate with strengthen EAS needs to be context-
intermediaries. Capacity development is thus needed on both supply and specific, some pre-conditions need
demand side of EASs, to: to be in place to facilitate transition

••Organize
towards market-oriented EAS. This
producers: organized producers have increased bargaining power,
includes a macro-level enabling
can reduce transaction costs through bulk input purchases or transport
environment which goes beyond the
arrangements, articulate their demands and advocate for their needs.
agricultural sector (trade policies,
Strengthening producer organizations (POs) is a crucial function of EAS.
price stabilizer, tax, subsidies etc.).
POs and cooperatives often become key players in providing services and
connecting to markets.

••Organize and coordinate service providers through multi-stakeholder

platforms: collective efforts among multiple EAS actors are crucial in
Infrastructure related to
transport, storage,
effectively providing market-oriented services. However, EAS providers processing, ICTs, etc.
often work in isolation and are unaware of non-traditional actors providing
relevant services: e.g. micro-credit institutes or market actors.
Existence of credit and
••Investment in skills development for diverse service providers and
producers is fundamental. The needs range widely from technical know-
micro-credit schemes

how, Information and Communication Technologies (ICT), marketing and

business skills, financial literacy, certification schemes, traceability, food Existence of functioning
safety etc. to networking, negotiation and conflict management. The latter institutions and markets
is very important to overcome trust issues common among different actors
(e.g. smallholders and intermediaries).

••Monitor, evaluate and learn (MEL): few of the good practices and lessons
learned on market-oriented EAS have been captured and shared. A system-
wide mechanism must be created to facilitate not only monitoring and
evaluation (M&E) but also learning and experience exchange.

Example
Empowerment thru Creative Integration (ECI)
in Pakistan provided training of trainers
and mentorship to local agri-entrepreneurs
on market linkages and business-related
topics. Common Facilitation Units were
established at district level as a business,
training and service hub and service
providers were paid on a commission basis
based on the volume of sales brokered.
©FAO/Asim Hafeez

This model had a localized impact of

public and private partnership and enabled
smallholder producers to access markets.
Making extension and advisory services market-oriented

Creating an enabling environment for

agribusiness and market orientation
An enabling environment for integration of smallholders producers

©FAO/TowelaMunthali
into markets goes far beyond EAS. A much broader context needs to
be considered, including policies, market development and emerging
trends, changing consumer preferences and investments. Policy
framework and institutional arrangements greatly influence service
provision to rural producers, and key factors to consider include:

••Changing the orientation of services and integrating market

dimension systemically and at different levels. This might entail
Remember!
reforming existing EAS systems and engaging with different actors, >> Market-oriented EAS require safeguards to
rather than adjusting parts of the current system. prevent partial advice, conflicting messages

••Facilitating innovation processes through multi-stakeholder

platforms, with EAS providers as brokers. Innovation is not only
and possible negative impacts such as
price volatility or the use of environmentally
unsustainable practices (like intensive use of
about new technologies but also processes, business models,
pesticides). This can happen if producers are
forms of collaboration and organization to access markets and
driven to follow short-term market trends and
other services.
start to neglect long-term food security and
••Introducing smart policies as well as legal and regulatory
frameworks designed to facilitate market orientation with clear
environmental sustainability.
>> Public market-oriented EAS should become
support mechanisms for smallholders (e.g. taxes, subsidies, access
facilitators of information and brokers of
to credit, strengthening POs and collective action).
linkages, neutral arbitrators with a regulatory
••Improving the business environment: incentivizing enterprise
formalization and simplifying registration procedures for micro,
role. It is important that public extension does
not disperse its resources to compete with
small and medium enterprises both on the producers’ and providers’ private and other non-public service providers.
side and increasing efficiency through digitalization. >> Private investment also includes payment

••Investing smartly: public investment is key to creating incentives for

non-state actors and initiating steps towards pluralistic market-
oriented business models. Evidence-based decisions need to be
made on how and where to invest without distorting the markets
with unsustainable subsidies.
••Creating incentives for private investments and partnerships.
This may be in the form of advice embedded in services, bundled
services, contract farming, public-private partnerships etc.
Regulatory frameworks must facilitate these arrangements but
ensure that no one is left behind.
for EAS from private consultants, through PO
membership fees, and advice embedded in the
transaction of goods (e.g. fertilizers, machinery)
or bundled with other services (e.g. credit and
finance). While some, including smallholders,
might be willing to pay for quality advice, this
should not be overestimated. Even if clients’
participation in costs is an important funding
source of EAS, access to services by the poor
needs to be ensured, e.g. through vouchers,
targeted support to small-scale farmer groups

••Incentivizing private providers to broaden their client base and

service the poor and more vulnerable. Mechanisms are needed to
and strengthening POs in service provision.

ensure that the small and poor producers who are unable to pay
for private services are covered by other providers and/or targeted
programmes. The public sector must provide a regulatory and
quality assurance function, as well as ensuring services related to
public goods and to the needs of the poor. Example

••Rethinking the role of public EAS providers – going beyond farm

production – advocating and strengthening EAS for market oriented
services, by providing credible guidance to make changes, linking it
with relevant support services and information (e.g. micro finance,
market and price info, legal services). Establish mechanisms to work
effectively with private sector cooperatives and POs, and integrate
smallholders into markets in a sustainable way.
In 2017 in Uganda, the Ministry of Agriculture,
Animal Industry and Fisheries (MAAIF) launched
the Guidelines, Standards, Code of Ethics and
Process for Registration and Accreditation
of Extension Service Providers. It makes
‘market-oriented EAS based on local, regional
and international market demands’ explicit, as
well as MAAIF’s role to ‘promote agribusiness
services, enterprise development and
agricultural value chain development in close
collaboration with the private sector’.
Making extension and advisory services market-oriented
Making services more market-oriented
Market-oriented farming and services means actors working
together to increase productivity and profitability by managing
farming as a business, linking to markets and acting collectively.
This entails:
••Differentiating strategies and services among target groups
to foster agri-entrepreneurship and improve access to local,
domestic and international markets, and match producers with
markets. Explore options such as niche markets, local markets,
public purchase for aid or schools, outgrowing etc. that are
inclusive to youth, women and other disadvantaged groups.
••Providing bundled services: market-oriented EAS requires diverse
services to simultaneously generate timely information on
market, price, weather, finance and other services needed along
the value chain. Business service centres, community-run kiosks,
farmer business schools, value chain platforms, association of
providers, POs and cooperatives can be very helpful.
••Using ICT to provide timely and accurate information. New
technologies such as blockchains can also improve transparency
and traceability along value chains. However, ICT and digital
services need to be affordable and accessible for the poor and
those in remote locations, and relevant to their needs. Investment
in developing the capacities of producers as well as service
providers and bridging digital and literacy gaps is critical to
making this a success.
••Reducing risks for producers: smallholders are often perceived
as risk-averse because of their extremely vulnerable position,
leaving them more exposed in the context of fluctuations and
volatility of market prices. EAS providers could help them
manage these risks and take advantage of new opportunities
(e.g. by organizing them, providing timely weather and price
information, providing skills for risk assessment and planning,
linking to risk reduction and insurance schemes).
••Produce to sell: Market visits and fairs facilitate partnerships
between producers and market actors and to understand better
market demands, quality and contractual requirements.
Useful resources
Blum, M.L., Cofini, F. & Sulaiman, R.V. 2020. Agricultural extension in
transition worldwide: Policies and strategies for reform. Rome.
Chipeta, S., Christoplos, I. & Katz, E. 2008. Common Framework on
Market-oriented Agricultural Advisory Services. Neuchatel Group.
FAO. 2017. Pluralistic Service Systems Market-oriented services for reducing
rural poverty. Conceptual Framework.
FAO. 2018. Sustainable Food Value Chains Knowledge Platform; Developing
Gender-Sensitive Value Chains. Guidelines for Practitioners.
Kahan, D. 2011. Market-oriented advisory services in Asia - a review and
lessons learned. FAO.
Remember!
>> Policy-makers and investors (and the majority of
service providers) often concentrate on producers
with commercial potential and capacity. This may
marginalize the poor and increase inequality, as formal
market requirements may crowd out smallholders.
>> Women have more difficulty accessing services and
markets. Market-related activities and cash crops are
often male-dominated and women can be deprived of
guidance. Public sector extension thus needs to ensure
relevant support for women not only in food production
for domestic consumption, but also in commercial
activities and participation in POs and cooperatives.
Example
In Malawi, the FAO project, funded by the Government
of Flanders on marketing capacity building for
smallholder farmers uses farmer field schools (FFS)
and Farm Business School (FBS), with tailored
modules and hands-on coaching to build the capacity
of smallholder farmers and POs. FFS Networks play a
critical role in providing post-harvest and marketing
services such as bulking, grading, bagging, storage,
value addition, market information and interface with
potential players in the value chain. The key game
changers are the annual market symposia which
bring together farmers, POs and other value chain
players to acquire deeper understanding of the market,
its actors, timing of demands, quality standards,
transaction costs and contractual arrangements for
more predictable and sustainable business ventures.
The resulting trust has helped partnerships evolve
organically, with significant volume of commodities
traded, generating income for the community and
leading to an improvement in livelihoods.
This brief was prepared by FAO’s Research
and Extension Unit and Inclusive Rural
Transformation and Gender Equity Division,
with contributions from David Kahan and
James Okoth (FAO Malawi).
Contacts
Research and Extension Unit
OINR-Chief@fao.org
CB4395EN/1/05.21
www.fao.org/research-and-extension
© FAO, 2021
Food and Agriculture Organization of
the United Nations
Rome, Italy